Google’s O3b Networks -vs- EASSy. Fight! Part 1

 

If you’ve been keeping pace in the Afri-tech space lately, you have probably heard about two of the biggest projects battling for the Broadband Title by being the first to bring ubiquitous broadband access to all of Africa: the EASTERN AFRICA SUBMARINE CABLE SYSTEM (EASSy?) project and the Google-backed O3b Networks satellite project. If you haven’t, well, sit back, open up your brain, let me lay down the skinny for you. I’ll give you the play by play, complete with my layman’s sideline commentary on what this fight means for you my fellow African Diaspora and those back “home”.

Now don’t be fooled into thinking that this is going to be a fair fight by Western standards—with rules of engagement, sportsman-like conduct and the perfunctory nod of gentleman’s honor, blah blah blah. Oh no, this fight, my fellow techies, is going to be dirty, profit-centered (no matter their respective corporate mantras), knock-down, drag out, slap your mama and yo’ granny, kick’em while they are down kind of back alley scuffle. There will be clear losers and winners, and most disturbingly, there will be collateral damage. First, I think I should introduce you to the contenders.

THE CONTENDERS
In the red corner, let me introduce you to EASSy. The East African Submarine Cable System was established November 2002. It was born as a “Business Manifesto” from a November 2002 East African Business Summit, that there should a submarine cable on the East African coast, to complete the international undersea fibre loop that connects the rest of the world. It’s a partnership of East Africa’s “who’s who” in ICT and Telecommunications players including Telkom Kenya, Tanzania Telecommunications Company Limited, Uganda Telecom Limited, MTN Uganda, and Zanzibar Telecommunications Limited – ZANTEL, to name a few. More here. The completed cable is to provide cheaper backhaul high speed bandwidth to the 21-member countries‘ telecommunication’s infrastructure via a newly constructed fibre-optic network of cables. Alcatel Lucent was awarded the contract to build out EASSy.

In the blue corner is the svelt, well-connected O3b Networks–O3b standing for “other 3 billion” individuals world-wide not connected by broadband. It’s a partnership backed by Google, HSBC Holdings PLC, Allen & Company, and Liberty Global. O3b’s strategy is to launch a series (17) of Low Earth Orbit (LEO) satellites that will provide “3G/WiMAX Wireless Backhaul and IP Trunkin”—which in plainspeak means they make it cheaper for phone and internet companies to roll out high speed mobile internet and broadband to customers via satellite. Here’s something interesting, O3b Networks is helmed by none other than Greg Wyler. More on him later. Thales Alenia Space‘s satellite building expertise helped the design and launch responsibilities for O3b’s network.

THE GAME PLANS

While these two companies have embarked on different roads to market, they all have the same goal in mind—build out the networks so more people (read: potential customers) can connect to our services. Globally, the digital divide between those that have high speed access and those that don’t in developed regions is quickly narrowing. This means that markets in developed regions are reaching saturation points, running out of potential customers to sign up. This doesn’t leave a lot of room for late-comers to the connectivity party hoping to hook up with anyone. So what’s the next best thing? Start your own party of course.

O3b’s game plan is to tap into undeveloped regions around the world that are too remote to be served traditionally or haven’t built-out suitable fibre optic networks to benefit from the high speed undersea cables. O3b plans to hurdle over this infrastructure shortfall, by jumping all the way into space.

This from Google’s Africa Blog:

The O3b satellite constellation will provide high-speed, low-latency backhaul services at speeds reaching into the gigabits per second. The satellites will orbit the earth at about one-third the altitude of a geo-synchronous satellite, which means it takes less time for data to travel up and back. This low latency translates into better voice connections as well as a snappier web experience.

Current geo-stationery satellite-delivered backhaul offerings are expensive, clogged and wrought with bandwidth limitations. It’s not uncommon for 2 or 3 internet cafe’s in East Africa to share a single 1MB connection. Divide that 1MB of bandwidth among the average 15-20 surfers at each of those 3 cafes and you get an idea how maddeningly slow internet speeds can be. Exerstertbating the problem is the fact that 1MB comes at a cost to the cafe owner of almost $2000 per month.

 

EASSy’s strategy is grounded, literary, in fiber. A high speed network of optical fiber cables to be exact. Most of the world’s internet and telecommunications traffic runs on a global interconnected network of undersea fiber optic cables—hence the ‘world-wide web’. But the problem with this network is that it ignores Africa (as a whole) altogether. With the exception of South Africa, and a handful of landing points in West and Northern Africa, the global undersea cable network treats Africa like an annoying speed bump that you guide traffic around. As you can see in the diagram above, East Africa is wholly ignored. EASSy has been hard at work “closing the final link” since 2003.

The diagram also illustrates how deep the digital divide is between Africa and the rest of the globe, with Africa only getting an anemic share of the broad band cake. Not surprisingly, the heaviest traffic by far is routed between the East Coast of America and the EU.

SHOW ME THE MONEY

Now to the fun stuff. It comes as no surprise that successful completion of either of these two projects requires a healthy dose of financing. At the present, O3b Network requires US$650 million with US$60 million already secured through it’s financing partners. It should be noted that O3b, at least of publication of this article, is entirely privately funded. Remember Greg Wyler, he’s a serial entrepreneur with first-hand knowledge on the realities of trying to lay networks in Africa. He previously had an ill-received partnership with Rwanda’s “development-at-all-cost president, Paul Kagame. The US$20 million investment fizzled in a cloud of finger-pointing after 4 years. I can only assume that Mr. Wyler’s new venture was born out of experience, and he has learned from that failure, and like a perennial top athlete, is bouncing back with a new twist to the game plan.

EASSy, while cheaper by comparison, will require in excess of US$248, and I say ‘in excess’ because, as an African, I know that things magically tend to cost more than the amount put on paper. EASSy is being funded by the World Bank, various international development banks, contributions from the members of the consortium, and up until last year, NEPAD.

We all know that where there’s money in Africa, invariably big government, corruption, bickering, and back-stabbing are never too far behind. NEPAD threw a spanner in the works last year by deciding to drop out of the EASSy pact because of strategic in-fighting as to how best deploy the network. And just to further muddle the direction of the project, NEPAD became a direct competitor with plans to lay it’s own cable, with the blessing of various governments and telecoms that sided with NEPADS deployment direction. This creates an interesting tit for tat, because governments (read: South Africa, et al) can now disallow EASSy from landing the cable on it’s shores in order to protect NEPAD’s initiative and once again maintain a monopoly on bandwidth. And with NEPAD’s departure, the future of EASSy is now clouded. So much for competition is good for business.

< End Part 1 >